AN ASSESSMENT OF TENEMENT RATING ADMINISTRATION IN NASARAWA, NASARAWA STATE

AN ASSESSMENT OF TENEMENT RATING ADMINISTRATION IN NASARAWA, NASARAWA STATE

ABSTRACT

Tenement rate is generally a tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property. This form of tax is reported to be one of the most stable sources of revenue to governments, however most state and local governments in Nigeria are yet to tap revenue from this form of tax. Revenue generated from this tax is used to provide basic amenities to the people. This research aimed at examining the constraints to effective tenement rate administration in Nasarawa. The data for the research was collected from the staff of NUDB and owner/occupier in the study area by conducting interview and the simple random sampling techniques was used in the administration of questionnaire. The data was analyzed through the use of percentage. Among the problems identified that militate against effective tenement rate administration are lack of publicity, imprecise street numbering and absence of enforcement machinery. Possible recommendations were made like educating the public on the importance of rating exercise, enforcement tribunal should be instituted to deal with cases ranging from default in rate paying and government should conduct proper survey in order to update some street names/numbers to enhance accessibility and identification of properties for effective rate administration.

CHAPTER ONE: INTRODUCTION

1.1       Background Of The Study

Tenement rate which is a form of tax chargeable by government was defined as “a tax imposed by municipalities upon owners of real property” (Wikipedia 2008). The food and agriculture organization (FAO) (2002) defines tenement rate as an annual advalorem tax base (i.e. the tax is calculated according to the value of the property). Such taxes have been in existence for centuries and their benefits are well known. They are transparent, cheap to administer, efficient to collect and well understood by the rate paying public. They are administratively feasible in virtually any circumstances and being locationally fixed are particularly suitable as a source of locally generated revenue for local governments. Although the very transparency of a tenement rate can make it unpopular, well administered tenements rates have the potential to generate significant revenue and reduce opportunities for corruption. Tomori (N.D) however reports that at present, yields of urban property taxes in developing countries are extremely low. Its contribution to total public sector tax revenues is negligible and its share of municipal revenue is typically less than 30 percent.

In Nigeria, tenement rating has limited revenue potential, firstly because the nation places higher priority on oil revenue and secondly because in many cases it has proven difficult to administer. To ensure effective utilization of tenement rate policies in Nigeria, the government needs to adopt a vibrant legal and administrative structure that will hasten documentation of land transactions so as to assist the government in implementation towards sound revenue mobilization for municipal development. The only fully appreciated tax base for local government world appear to be tenement rate. Since proper and effective administration of poverty eradication, the proper authority must take more than a casual stride to ensure its success (Aliyu 2008).

The rationale for administering tenement rate is to stop the degeneration of immediate local environments. The environments where people should be habitable, comfortable, neat, serviceable, sustainable and conducive to their survival. It should be free from disease attracting death causing situations.

All services needed for the survival of life and properties should be made available, and such facilities provided should be made present on a regular or predictable basis. The equipment for sustaining or maintaining the facilities should be made available. The basic services/facilities to be provided include road networks, market places, motor parks, abattoirs, street lights and drainage lines (Oyegbile 1996). In most urban centre of Nigeria, facilities are either lacking or have deteriorated beyond repair and governments are yet to correct these anomalies.

1.2       Statement of Problem

Over the years, facilities in Nasarawa state public and private establishments have degenerated to a great extent. Road networks in some parts have developed potholes and in some areas access roads are lacking. Some area councils lack pipe borne water, insufficient health care centers and poor drainage among others. With a source of revenue such as this at the disposal of the state and its local governments, a lot of these problems facing the local government councils can be taken care of if tenement rate is effectively administered and collected. To this end, the research seeks to unravel the reason why tenement rating is not being effectively administered and utilized in Nigerian local government. Thus the researcher seek to carry out an assessment of the challenges of tenement rating administration in Nasarawa state.

1.3       Aim and Objectives

The aim of this project is to assess tenement rating administration in Nasarawa, Nasarawa state with a view to suggest solution to an identified problems in the system. In order to achieve the above aim, the following objectives shall be pursued:

1. To identify the types of properties that are prevalent in the study area
2. To appraise the system of tenement rate assessment in the study area.
3. To examine the method of rating collection in the study area
4. To examine the problems inherent in tenement rate administration in the study area

1.4       Research Questions

The questions which this project seeks to answer in respect of tenement rate collection in Nasarawa state are;

1. What are the types of properties that are prevalent in the study area?
2. What is the system of tenement rate assessment in the study area?
3. What are the methods of rating collection in the study area?
4. What are the problems inherent in tenement rate administration in the study area

1.5       Significance of the Study

This project is an assessment of tenement rating administration in Nasarawa, Nasarawa state. Practically the study will assist the Nasarawa State Board of Internal Revenue in positively administering their responsibilities in raising revenue through tenement rating in the state. It will also help policy makers in adopting appropriate policy on property tax and sanctions against violation or evasion of taxes by individuals, groups or companies. It will also help the officers of the Board of Internal Revenue to adopt new strategies in ensuring compliance of individuals, groups and companies in fulfilling their responsibilities as citizens of the country.

Theoretically, it will help in the education of the management, administrators and tax officers on the need for continuous tax assessment towards increasing the revenue base of the government. It will also assist in the education of the general public and tax payers on the need to carry out their responsibility as citizens of the country.

The study will be of great importance in providing information to readers, especially those involved in financial administration to gain knowledge on the administration of tenement rating as a veritable means of generating revenue. 

It will increase the data base for scholars and practitioners interested in the field of revenue generation through personal income taxation.

Finally, it will serve as a reference point to scholars, and students who want to conduct research in future in the field.

1.6       Scope and Limitation of the Study

The scope of this project is limited to the assessment of tenement rating administration in Nasarawa, Nasarawa State. the study will be restricted  to Nasarawa town in Nasarawa state between the period of 2012 to 2017.

1.7       Definition of Terms

Tenement rate: Tenement rate is a charge levied on the occupier of a property for the provision of improvement and infrastructural facilities within a given area and it is levied on Nairage basis of the assessed (annual) value (Oyegbile 1996).

Rate: It is the payment for the ownership or occupation of something valuable, that is, rate is the payment for the benefit derived or derivable from services.

Rate Payers: These are the property owners or occupier as case may be whose properties are ratable.

Rating Authority: This is the government entity into whose hands the issue of tenement rating administration and collection is entrusted by the enabling law.

Rating Area: It is the area of operation of any rating authority.

Rating Authority: This are bridge that have the power to make the level rates on the basis of assessment in respect of the net annual value of tenement in its rating area to achieve certain government objective, this includes the control of inflation and deflation all for the purpose of applying the processed there of to local purpose of a public nature.

Tenement: Means land with building which is held or occupied as a district or separate holding or tenancy or storage space occupied for project or business but does not include land without building (sec 1 (2) Cross River of Nigeria Tenement rating edict No 5 of 1984).

Assessed Value: This means that value at which a tenement is worth for at the time been assessed.

Net Annual Value: This means that open market rent at which it is estimated the tenement might reasonably be expected to be let from year to year as at the date of valuation without any collateral or other than economic consideration being given taken or promised less reasonable allowance for the cost of repairs and outgoing necessary to maintain the tenement can notes rights and interest over a unit of rentable property (Lawal 2015). The term property rating and tenement rating have been regarded as being synonymous and have been used interchangeably in this project.

1.8       The Study Area

Nasarawa Emirate in Nasarawa State is located in the Central region of Nigeria. It is flanked by Keffi and the Federal Capital to the North. To the South, it is bounded by Benue River and to the west; it bordered the present Gadabuka and Toto Local government area which are of course, part of the Emirate. To the East, it is bordered by Doma, Lafia and Keana Local Government Areas all of Nasarawa State.

PHYSICAL CHARACTERISTICS

The major things considered under physical characteristics of Nasarawa are, geographical location, temperature, rainfall, geology, wind, vegetation, humidity, soil.    

TEMPERATURE

The temperatures are generally high during the day, particularly between the months of March and April. The main monthly temperatures in the state range between 20⁰C and 34⁰C with the hottest months being March/April and the coolest months being December/January.

RAINFALL

The study area experience dry season without or little’s rainfall from November to March of about 95mm, which is wet season is from April to October of about 1.30mm,

GEOLOGY

From the Jos Plateau, this comprises of basement complex metamorphic rocks, granite and basalt of two or more ages. The basement complex is covered by shadow soil.

WIND

Nasarawa local government is determined by the seasonal movement on inter-tropical convergence zone [ITCZ], which represents the moving frontier between the moist Atlantic air from the south and the dry air from the north. In the dry season from November till March the north east wind are dominant. For the remaining of the year, the south-western winds are prevailing. Generally, the wind velocity is relatively low.

VEGETATION

Nasarawa is situated in the Benue valley between the Benue river and Jos Plateau. This area lies within the part of southern guinea savannah. The vegetation of Nasarawa has, to a large extent resulted from extensive agricultural use of the land, the predominant vegetation type is partly savannah which is characterized by a discontinuous canopy, shrubs and grasses many areas are affected by man through bush burning during the dry season. Among the common trees are oil bean trees, locust bean free and isoberline trees.

RELATIVE HUMIDITY

The relative humidity is the measurement of deepness of the atmosphere which varies from place to place and different time of the day. The level of humidity in Nasarawa state in January is quite less that 40% which rises as from February to July to about 88%. By April when the steady rain commences it will be about 75% by August when the inter-tropical discontinuity is at it northern part, must position of the entire state will experience tropical marine wind and continues till December.   

SOIL

The major soil units of Nasarawa belong to the category of oxisols or tropical ferruginous soils. The soils are derived mainly from the basement complex and old sedimentary rocks. Lateritic crust occurs in extensive areas on the plains while hydro orphic soils (limbic incept sols) occur along the flood plains of major rivers (Nyangba, 1995).

SOCIO-ECONOMIC CHARACTERISTICS

Nasarawa main economic activity is agriculture; cash crop, such as yam, cassava and egusi (melon). Production of minerals such as salt is also another main economic activity of people in the state; Nasarawa produces a large proportion of the salt consumed in the country.

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